India is poised to launch a transformative National Cooperative Policy spanning 2025 to 2045, aimed at revitalizing its long-dormant cooperative movement and creating employment opportunities for its 1.4 billion citizens. Union Home Minister Amit Shah announced the initiative during a national meeting of state cooperation ministers, outlining ambitious goals such as establishing two lakh Primary Agricultural Credit Societies (PACS) by February 2026 and ensuring the presence of at least one cooperative in every village within five years. The policy aims to unify federal and state-level cooperative strategies while integrating financial, agricultural, and digital reforms to drive inclusive, sustainable economic growth.
A 20-Year Vision for Cooperatives
India’s new National Cooperative Policy is being positioned as a generational pivot—stretching from 2025 to 2045—with the stated objective of transforming cooperatives into engines of economic development and employment generation. Unveiled by Home Minister Amit Shah, the policy is designed not merely as a bureaucratic overhaul but as a comprehensive framework that blends state-specific strategies with national ambitions.
Crucially, each state is expected to draft its own cooperative policy by January 31, 2026, customized to regional needs while aligning with the national vision. The policy's long-term focus signals an intent to insulate the cooperative sector from political volatility and short-term planning cycles, ensuring structural stability through to India's centenary of independence in 2047.
Scaling the Rural Banking Backbone
A central pillar of the new initiative is the rapid expansion of Primary Agricultural Credit Societies (PACS), which serve as the grassroots-level financial institutions in India’s rural economy. The government has set an ambitious target to establish 2,00,000 PACS by February 2026—a feat that would dramatically increase credit penetration in underserved areas.
To meet this deadline, states have been urged to act with urgency, particularly in integrating these credit societies into broader agricultural and financial inclusion programs. Shah emphasized that special focus must be placed on urban cooperative banks and credit societies, which often operate with limited oversight. Regulatory reforms, including bringing cooperative banks under the purview of the Banking Regulation Act and the Reserve Bank of India (RBI), have already laid the groundwork for systemic accountability.
Tackling Historical Challenges
Minister Shah attributed the decline of India's cooperative movement to three key structural failures: outdated legislation, stagnant operational scope, and pervasive nepotism in recruitment. The policy seeks to address these chronic weaknesses through a combination of regulatory modernization, institutional innovation, and human capital development.
To this end, the establishment of Tribhuvan Sahkari University has been proposed. This institution will serve as a national hub for cooperative education, training, and research—filling a long-standing void in capacity building and governance within the sector.
Catalyzing Rural Entrepreneurship and Self-Reliance
The government is positioning cooperatives as a vehicle for rural entrepreneurship, especially among economically marginalized groups who have historically lacked access to capital. Shah noted that while over 60 crore citizens have now received basic amenities under welfare schemes—from housing and healthcare to sanitation and food security—the next leap must be economic.
“Many aspire to become entrepreneurs but lack startup capital. Cooperatives allow collective pooling of small resources for meaningful economic activity,” Shah said, highlighting the democratic and inclusive character of cooperative finance.
Institutional Strengthening and Digital Transformation
The Ministry of Cooperation is also working to bring cooperatives into the digital era. A national database is being developed to track cooperative activities, while digitization of PACS and registrar offices is underway. These digital initiatives aim to boost transparency, efficiency, and scalability across the sector.
Simultaneously, the policy supports the formation of Multi-Purpose Primary Agricultural Credit Societies (M-PACS) that integrate dairy, fisheries, and grain storage functions. This convergence model echoes the government’s broader push toward multipronged rural development under initiatives such as the world’s largest cooperative-led grain storage scheme.
The Power of Collaborative Federalism
At the core of the new policy is the belief in cooperation among cooperatives—a model first tested in Gujarat and now poised for national adoption. It relies on interlinking cooperative institutions across sectors and geographies to achieve economies of scale, market access, and financial resilience.
This collaborative federalism was on display during the ministerial meeting, where states and the Centre jointly evaluated progress and outlined steps for institutional integration. Notably, the discussion included the roles of three newly launched national multi-state cooperative entities:
- National Cooperative Export Limited (NCEL) – to enhance global market access
- National Cooperative Organic Limited (NCOL) – to support organic agriculture
- Bharatiya Beej Sahkari Samiti Limited (BBSSL) – to strengthen seed supply chains
Toward White Revolution 2.0
A notable facet of the cooperative push is the planned White Revolution 2.0, aimed at revitalizing India’s dairy sector through cooperative models. Given the historical success of Operation Flood, this modernized iteration seeks to apply new technologies and market strategies to reinvigorate dairy cooperatives nationwide.
This, alongside Shah’s call for promoting natural farming, points to a broader ecological and sustainability agenda within the cooperative strategy.
Conclusion: A Policy Anchored in Legacy, Aimed at the Future
India’s forthcoming National Cooperative Policy is not just an administrative document—it’s a strategic blueprint that seeks to revive the country's oldest economic tradition for the demands of a 21st-century economy. By fostering institutional accountability, enabling grassroots entrepreneurship, and encouraging federal cooperation, the government is betting that cooperatives can once again become central to India’s economic and social transformation.
If implemented effectively, this policy could serve as a global model for inclusive economic development powered by democratic financial institutions.
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